NATIONAL DEVELOPMENT COMPANY, REPRESENTED BY ITS AGENT, THE PHILIPPINE NATIONAL BANK, PLAINTIFF AND APPELLANT, VS. JOSE YULO TOBIAS, DEFENDANT AND APPELLEE.

Appeal
taken by plaintiff, National Development Company, represented by its
agent, The Philippine National Bank, from an order of the Court of
First Instance of Negros Occidental dismissing plaintiff’s complaint
upon the ground of prescription of action, without special
pronouncement as to costs.

In said complaint, filed on
March 22, 1960, plaintiff seeks to recover from defendant, Jose Yulo
Tobias, the sum of P6,905.81, plus interest and attorney’s fees, under
a promissory note of said defendant, dated and issued on May 13, 1946,
for the sum of P7,000.00, payable “on demand after date” to the order
of said plaintiff. Upon being summoned, the defendant filed a motion to
dismiss upon the ground that “the action upon which the complaint is
based has prescribed long ago” more than ten (10) years having elapsed
since May 13, 1946, when said promissory note was issued and
plaintiff’s action accrued. Hence, the aforementioned order of
dismissal, which plaintiff assails as erroneous upon the theory that
the statute of limitations does not run against the plaintiff because
the same is an instrumentality of the Government. In support or this
view plaintiff cites the case of the Government of the Philippine
Island vs. Monte de Piedad (35 Phil., 738).

Plaintiff’s pretense is clearly devoid of merit. The case cited in not
in points, it having been instituted by the Government of the
Philippine Islands. Plaintiff herein is neither the Government of the
Republic nor a branch or subdivision thereof. It is true that plaintiff
is an jistrunientality of such Government, but as this Court has held
in the case of Association Cooperativa de Credito Agricola de Miagao vs.
Monteclaro (74 Phil., 281), “even the Agricultural and Industrial Bank,
which is a government-owned and controlled corporation and which has
been created to promote agriculture and industry on a larger scale than
agricultural credit cooperative associations, cannot be said to exercise a sovereign function. It is, like all other corporations capitalized by the Government, a business corporation,” and, as such, its causes of action are subject to the statute of limitations. To the same effect are the cases of Monteadora vs. Cebu Portland Cement Go. (54 Off. Gaz. 4289), Price Stabilization Corp. vs. CIR (54 Off. Gaz. 4472), GSIS vs. Castillo. 98 Phil., 876 (52 Off. Gaz. 4269), and Manila Hotel Employees Association vs. Manila Hotel Co. (73 Phil., 374).

That
plaintiff herein does not exercise sovereign powers – and, hence, can
not invoke the exemptions thereof-but is an agency for the performance
of purely corporate, proprietary or business functions, is apparent
from its Organic Act (Commonwealth Act 182, as amended by Cpmmonwealth
Act 311) pursuant to section 3 of which it “shall be subject to the
provisions of the Corporation Law in so far as they are not
inconsistent” with the provisions of said Commonwealth Act “and shall
have the general powers mentioned in said” Corporation Law, and,
hence,’ “may engage in commercial, industrial mining, agricultural, and
other enterprises which may be necessary or contributory to the
economic development, of the country, or important in the public
interest,” as well as “acquire, hold, mortgage, and alienate personal
and real property in the Philippines or elsewhere; * * make contracts
of any kind and description;” and “perform any and all acts which a
corporation or natural person is authorized to perform under the laws
now existing or which may be enacted hereafter.”

In
fact, plaintiff was sentenced to pay costs in Batong bacal vs. National
Development Co. 93 Phil., 182; (49 Off. Gaz. 229), and National
Development Co. vs.
CIR, 106 Phil., 307; (September 30, 1959), despite the fact. that “no
costs shall be allowed against the Republic of the Philippines, unless
otherwise provided by law,” pursuant to Rule 181, Section 1, of the
Rules of’Court. Wherefore, the order appealed from is hereby affirmed
with costs of this instance against plaintiff-appellant.

Bengzon, C. J., Padilla, Bautista Angela, Reyes, J.B.L. Barrera, Paredes, Dizon, Regala, and Makalintal JJ., concur.